Home buyers become more vulnerable as computer hackers hone their skills

DEAR MR. MYERS: We agreed to buy a house, and the deal was set to close on April 13. A few days before the scheduled closing date, we received an official-looking email providing us with final instructions for where the money needed to complete the transaction should be wired. We were suspicious because the new instructions were different from the ones that we had originally received, so we called our agent and he discovered that it was a complete scam! It took a few extra days to clear up the mess and close the deal, but at least we didn’t lose any money. Please let your readers know about this type of fraud.

ANSWER: Consider it done. Concerns about this type of scam began to surface a few years ago, but the high-tech swindle appears to be growing as hackers find new ways to breach the computer systems of consumers and businesses alike.

The latest version of the ruse begins when a hacker breaks into a real estate licensee’s individual email account, or even all the accounts at the entire brokerage firm. Doing so can yield valuable information about upcoming realty transactions.

“After monitoring the account to determine the likely timing of a close, the hacker will send an email to the buyer, posing either as the title company representative or as the licensee,” said Jessica Edgerton, an attorney for the National Association of Realtors and an expert on cybercrime in the real estate market. “The fraudulent email will contain new wiring instructions or routing information and will request that the buyer send transaction-related funds accordingly.”

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Unfortunately, Edgerton adds, some home buyers have fallen for this scheme and lost hundreds or even thousands of dollars. Their purchase, of course, also can easily fall apart.

One tipoff that you might be a target of this latest scheme is any reference in the email to a “SWIFT wire” transaction, a term that suggests that the money you are supposed to send would be headed for an offshore account. It’s hard enough to get restitution from a U.S.-based scam artist; Getting cash back that has been stashed overseas is nearly impossible.

Also, any type of notification that your original payment instructions have changed should be confirmed with your real estate agent, your title insurer, the mortgage lender, and the closing attorney or escrow officer who is involved in the pending transaction. Don’t depend on calling the phone number that’s listed on the change-notification email or similar documentation, because there’s a good chance that you’d merely be talking with the con artist him- or herself.

REAL ESTATE TRIVIA: Abusive debt-collection agencies, identity theft and scams operated by impostors were the three most common types of consumer complaints filed with the U.S. Federal Trade Commission last year, the agency reports. Combined, the trio accounted for nearly 41 percent of the 2.7 million grievances reported.

DEAR MR. MYERS: I’m the world’s biggest fan of the movie “Grease,” starring John Travolta and Olivia Newton-John. Is there really a Rydell High School, where the story supposedly took place?

ANSWER: Believe it or not, Grease director Randal Kleiser recently said in an interview that the answer to your question is one of the most hotly debated among longtime fans of the hit film.

Before it was turned into a movie that was released in 1978, it started as a live play in Chicago that debuted in 1971 and then opened on Broadway a year later. But the film itself was shot in and around Los Angeles in the mid-’70s, with the area’s Venice High School and John Marshall High standing in for Rydell – even though most of the actors spoke with distinctive New York and New Jersey accents.

The film, which turns 40 later this year, still is the highest-grossing musical in history.

DEAR MR. MYERS: My husband and I will retire later this year, but the state that we live in now would take out a big chunk of our future Social Security checks for taxes. Do any states allow Social Security benefits to be tax-free? We wouldn’t be opposed to moving somewhere else if it would save us a bunch of money in state taxes!

ANSWER: Thirteen states levy taxes on their residents’ federal Social Security benefits. However, you shouldn’t automatically avoid them when choosing a retirement home.

The 13 states that may tax SSI benefits include Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, and Nebraska. The list is completed by New Mexico, North Dakota, Rhode Island, Utah, Vermont and West Virginia.

Yet, choosing a state in which to live based solely on taxes it may charge on Social Security benefits is a bad idea.

For example, some of those 13 states will waive Social Security taxes on homeowners based on their overall income but will hammer those same owners with high property-related taxes or fees. In some cases, it’s better – at least, from a financial standpoint – to stay in the longtime home or move into another property that’s in the same state.

Consult both a tax expert and a retirement-housing counselor for more information.